U.S. President Donald Trump reported on Wednesday, July 2, that the United States has finalized a tariff deal with Vietnam. The revised agreement includes the elimination of Vietnam tariffs on U.S. goods and a higher tariff on Vietnam shipments to the U.S, although it amounts to less than half of the 46 percent tariff imposed by the Trump Administration in early April.

The new deal includes:

  • A 20 percent tariff on Vietnam’s imports to the U.S.;
  • U.S. access to the Vietnam import market;
  • A zero percent tariff on U.S. imports into Vietnam; and
  • A 40 percent tariff on transshipments through Vietnam from third-party countries.

China, a top exporter to the U.S., has reportedly used Vietnam as a transshipment hub to circumvent the higher tariffs it pays on its exports.

The new deal between Vietnam and the United States will replace President Trump’s April 2 “Liberation Day” tariff assessment, which included a 46 percent blanket tariff on Vietnamese goods that were subsequently paused for 90 days and were due to expire next week. The initial announcement of \higher tariffs on Vietnam shipments was met with panic as many companies in the apparel, footwear, sporting goods, and outdoor markets have gradually moved more production to Vietnam from China since the U.S. imposed higher tariffs on China during the first Trump Administration.

According to the Office of the U.S. Trade Representative, U.S. goods exports to Vietnam in 2024 were $13.1 billion, up 32.9 percent ($3.2 billion) from 2023. U.S. goods imports from Vietnam totaled $136.6 billion in 2024, up 19.3 percent ($22.1 billion) from 2023. The U.S. goods trade deficit with Vietnam was $123.5 billion in 2024, an 18.1 percent increase ($18.9 billion) over 2023.

“Vietnam is essential to the U.S. footwear supply chain, especially for athletic shoes,” offered Matt Priest, president and CEO, Footwear Distributors and Retailers of America (FDRA). “In 2024, we imported 274 million pairs from Vietnam, accounting for over half of all athletic footwear imports by volume and value. With $10.6 billion in shipments last year, Vietnam is on pace to become our largest supplier in 2025. Disrupting that pipeline with additional tariffs would hit American consumers and our industry hard.”

Priest went on to say that many of those shoes already carry a 20 percent tariff, particularly popular athletic styles.

“Piling new tariffs on top of that isn’t just unnecessary – it’s bad economics. The administration should acknowledge the steep footwear duties already in place and avoid adding more strain to American families and businesses,” he added in his media statement.

President Trump again made the false claim that “Vietnam will pay” the 20 percent duty, which runs counter to the reality that tariffs are paid on foreign goods and are paid on landed goods by the importers of those products, and often ultimately make their way to the consumer via higher prices in-store or online.

The deal comes less than a week before a 90-day pause on many of Trump’s so-called reciprocal tariffs, which were to expire, sending U.S. duties on imports from dozens of countries soaring.

The Wall Street Journal raised the question in its reporting about the lack of clarity on which products would fall under the higher tariff rate for transshipments.

“It could refer to goods imported to the United States from Vietnam that actually originated in China. But it could also apply to Vietnamese products that use a certain amount of Chinese parts. The deal could include a lower tariff on goods that are made in Vietnam with fewer Chinese parts and materials, and a higher tariff rate for Vietnamese goods that contain many Chinese components,” the Journal wrote on Wednesday.

President Trump’s announcement came after he spoke with the Vietnamese General Secretary Tô Lâm on Wednesday morning, July 2.

The President’s full post reads:

“It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary of the Communist Party of Vietnam. It will be a Great Deal of Cooperation between our two Countries. The Terms are that Vietnam will pay the United States a 20 percent Tariff on any and all goods sent into our Territory, and a 40 percent Tariff on any Transshipping. In return, Vietnam will do something that they have never done before: give the United States of America TOTAL ACCESS to their Markets for Trade. In other words, they will ‘OPEN THEIR MARKET TO THE UNITED STATES,’ meaning that we will be able to sell our product into Vietnam at ZERO Tariff. It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam. Dealing with General Secretary To Lam, which I did personally, was an absolute pleasure. Thank you for your attention to this matter!”